Republican obstinacy may force the US into recession

As the US economy moves closer to the edge of the ‘fiscal cliff,’ partisan bickering is increasing
chances that a compromise will not be reached before the country dips into another recession

By J. Bradford DeLong

Illustration: Mountain People

The odds are now about 36 percent that the US will be in a recession next year. The reason is entirely political: Partisan polarization has reached levels never seen before, threatening to send the US economy tumbling over the so-called “fiscal cliff” — the automatic tax increases and spending cuts that are to take effect at the beginning of next year unless Democrats and Republicans agree otherwise.

More than a century ago, during the first Gilded Age, US politics was sharply polarized as well. In 1896, future US president Theodore Roosevelt was a Republican attack dog. He denounced Democratic presidential candidate William Jennings Bryan as a mere puppet of the sinister Illinois governor at the time, John Peter Altgeld.

Bryan “would be as clay in the hands of the potter under the astute control of the ambitious and unscrupulous Illinois communist,” Roosevelt said.

The “free coinage of silver” would be “but a step towards the general socialism which is the fundamental doctrine of his political belief,” Roosevelt added.

He and Altgeld “seek to overturn the … essential policies which have controlled the government since its foundation,” the former US president said.

Such language is as extreme as any we hear today — and from a man who was shortly to become US vice president (and later US president, following the assassination of former US president William McKinley). We have heard Texas Governor Rick Perry call obliquely for the lynching of his fellow Republican, US Federal Reserve Chairman Ben Bernanke, should he come to the Lone Star State. We have seen Kansas Secretary of State Kris Kobach explore the possibility of removing US President Barack Obama from the ballot in Kansas, because Obama is “not a natural-born citizen.”

However, neither Perry nor Kobach is likely ever to be a US president, whereas Theodore Roosevelt was more than a partisan. He was happy to make deals with Democrats — to put himself at the head not just of the Republican Party, but of the bipartisan Progressive coalition, trying either to yoke the two forces together or to tack back and forth between them to achieve legislative and policy goals.

Obama broadly follows former US presidents Ronald Reagan’s (second term) security policy, George H.W. Bush’s spending policy and Bill Clinton’s tax policy, as well as following the bipartisan Squam Lake Group’s financial regulatory policy, Perry’s immigration policy, US Senator John McCain’s climate change policy and former Republican presidential candidate Mitt Romney’s healthcare policy (at least when Romney was governor of Massachusetts). Yet he has gotten next to no Republicans to support their own policies.

Like Clinton before him, Obama has been unable to get Republican senators like Susan Collins to vote for her own campaign finance policies, McCain to vote for his own climate change policy and — most laughably — Romney to support his own healthcare plan. Likewise, he has been unable to get US Republican Representative Paul Ryan to endorse his own Medicare cost-control proposals.

There are obvious reasons for this. A large chunk of the Republican base, including many of the party’s largest donors, believes that any Democratic president is an illegitimate enemy of the US, so that whatever such an incumbent proposes must be wrong and thus should be thwarted. The Republican cadres believe this of Obama even more than they believed it of Clinton.